Jan V. Hansen is at the Danish Insurance Association. Rasmus H. Jacobsen and Morten I. Lau are at the Department of Economics, Copenhagen Business School, Denmark. Morten I. Lau is also at the Department of Accounting and Finance, Durham University Business School, Durham University, United Kingdom. The authors can be contacted via e-mail: email@example.com, firstname.lastname@example.org, and email@example.com. We thank the Danish Social Science Research Council for support under project #24-02-0124 and #275-08-0289, and the Danish Insurance Association and Tryg A/S for the provision of household data on insurance claims.
Symposium on the Methodologies of Behavioral Insurance
WILLINGNESS TO PAY FOR INSURANCE IN DENMARK
Version of Record online: 26 JUL 2013
© 2013 The Journal of Risk and Insurance
Journal of Risk and Insurance
Volume 83, Issue 1, pages 49–76, March 2016
How to Cite
Hansen, J. V., Jacobsen, R. H. and Lau, M. I. (2016), WILLINGNESS TO PAY FOR INSURANCE IN DENMARK. Journal of Risk and Insurance, 83: 49–76. doi: 10.1111/j.1539-6975.2013.12011.x
- Issue online: 17 FEB 2016
- Version of Record online: 26 JUL 2013
- Danish Social Science Research Council. Grant Numbers: #24-02-0124, #275-08-0289
- Danish Insurance Association and Tryg A/S
We estimate how much Danish households are willing to pay for auto, home, and house insurance. We use a unique combination of claims data from a large Danish insurance company, measures of individual risk attitudes and discount rates from a field experiment with a representative sample of the adult Danish population, and information on household income and wealth from registers at Statistics Denmark. The results show that the willingness to pay is marginally higher than the actuarially fair value under expected utility theory, but significantly higher under rank-dependent utility theory, and up to 600 percent higher than the actuarially fair value.